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DIW: German economy shrinks significantly in the first quarter

by alex

DIW: German economy shrinks significantly in the first quarter

GDP decline of 1.5 percent expected

According to the DIW Institute, the German economy will shrink significantly in the current first quarter. The gross domestic product is likely to fall by around 1.5 percent, the Berlin researchers predicted on Wednesday. At the end of 2020 it was still enough to achieve growth of 0.3 percent. The high number of corona infections and the resulting restrictions put a strain on economic development, albeit not to the same extent as in spring 2020.

“Above all, industry has come through the winter robustly so far,” says the economic director of the German Institute for Economic Research (DIW), Claus Michelsen. Despite temporary shortages of important intermediate goods in the automotive industry, the industry is likely to roughly maintain its production level in the final quarter of 2020.

According to the DIW, the service sectors are also getting through the lockdown better than they were just a year ago. The companies have now adjusted to the situation in many areas, it said.

According to a survey, German industry is looking more confidently into the future, driven by better export expectations. As a special evaluation of the latest economic survey of the German Chamber of Commerce and Industry (DIHK) presented on Wednesday showed, 31 percent of industrial companies assess their business situation as good – in autumn 2020 it was 23 percent. The “Handelsblatt” reported on it first.

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